KUALA LUMPUR • Malaysia could attract investments of up to RM100 billion (S$33 billion) in the rare earth sector over the next 10 years, once the government makes clear how it intends to regulate the industry.
Speaking at the Malaysia Global Business Forum yesterday, Entrepreneurial Development Minister Mohd Redzuan Md Yusof said some interested investors were hesitant to commit due to conflicting news on whether rare earth processing would be welcomed in the country.
"There are inquiries, but they made it clear they would put in money only once rare earth is regulated," he said.
Australian firm Lynas, which has become a crucial global supplier of the metals amid the ongoing US-China trade war, has been operating an ore refining plant in Kuantan, Pahang, since 2012.
It had initially faced losing its licence in September this year unless it shipped out 450,000 tonnes of waste material from the plant due to environmental concerns.
However, in late May, it was granted a reprieve and allowed to continue running while working towards making its operations radiation-free in six years.
China controls over 70 per cent of the world's production of rare earths and meets 80 per cent of US demand. The US-China trade war has made Lynas strategically important as the only major rare earth producer outside China, accounting for 12 per cent of global supply.
The highly-sought-after minerals are used in high-tech electronics and military applications.
Not everyone in Malaysia's administration shares Datuk Seri Redzuan's enthusiasm for the industry. Lynas has faced sustained public opposition in Malaysia for years, chiefly over concerns of radiation poisoning and, more recently, contamination of the local water supply.
Energy, Science, Technology, Environment and Climate Change Minister Yeo Bee Yin and Deputy Minister in the Prime Minister's Department Fuziah Salleh have maintained that licensing conditions still apply to Lynas and that it must still ship out its waste.
In his keynote address at the forum, Mr Redzuan said local players should help the industry by explaining to the public that the minerals are not as dangerous as claimed.
He said the government already has policies in place to ensure waste from rare earth processing is properly disposed of.
"The law is already in place," he said.